Correlation Between Gamco Global and Fidelity Freedom

Can any of the company-specific risk be diversified away by investing in both Gamco Global and Fidelity Freedom at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Gamco Global and Fidelity Freedom into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gamco Global Gold and Fidelity Freedom 2035, you can compare the effects of market volatilities on Gamco Global and Fidelity Freedom and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Gamco Global with a short position of Fidelity Freedom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Fidelity Freedom.

Diversification Opportunities for Gamco Global and Fidelity Freedom

0.55

Correlation Coefficient

Gamco Global  Fidelity Freedom

Very weak diversification

The 3 months correlation between Gamco and Fidelity is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Fidelity Freedom 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Freedom 2035 and Gamco Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Gamco Global Gold are associated (or correlated) with Fidelity Freedom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Freedom 2035 has no effect on the direction of Gamco Global i.e., Gamco Global and Fidelity Freedom go up and down completely randomly.

Pair Corralation between Gamco Global and Fidelity Freedom

Assuming the 90 days horizon Gamco Global Gold is expected to generate 1.05 times more return on investment than Fidelity Freedom. However, Gamco Global is 1.05 times more volatile than Fidelity Freedom 2035. It trades about 0.27 of its potential returns per unit of risk. Fidelity Freedom 2035 is currently generating about 0.02 per unit of risk. If you would invest  386.00  in Gamco Global Gold on December 22, 2024 and sell it today you would earn a total of  48.00  from holding Gamco Global Gold or generate 12.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Gamco Global Gold  vs.  Fidelity Freedom 2035

Gamco Global Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Gold are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gamco Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Fidelity Freedom 2035

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Freedom 2035 are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Freedom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gamco Global and Fidelity Freedom

The main advantage of trading using opposite Gamco Global and Fidelity Freedom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Fidelity Freedom can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fidelity Freedom will offset losses from the drop in Fidelity Freedom's long position.

The idea behind Gamco Global Gold and Fidelity Freedom 2035 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.